Core Cities

GVA voice

James Kingdom, Research

"The UK is now spending more on infrastructure than it has for over a generation. Maintaining the current level of investment at 1% of GDP improve the scale and quality of infrastructure and the demands made of it, as well as create jobs and growth. For every £1 billion spent on infrastructure, GDP increases by £1.3 billion. For every 1,000 infrastructure related jobs, a further 3,000 are created.

The evolving relationship between public and private sectors means that for every £1 invested by the state, there is £1.67 of private investment. Beyond increasing the amount of investment taking place, private sector involvement also helps improve competitiveness, project management, as well as provide access to expertise.

The main challenges the UK currently faces in relation in relation to infrastructure are how to improve delivery outside of London and the South East and how to empower the cities and regions so that they can increase investment that can be directed to where it is needed most.

The centralised nature of this country’s infrastructure, both from a funding and decision making viewpoint, means that economic need often outweighs economic potential when determining projects and spending levels. Yet the regions that show the most economic potential are being held back from achieving this through a lack of necessary investment.

Rather than repackaging the current infrastructure funding pot, we need a way of being able to make the pot bigger, and in an innovative way that doesn’t go against current public spending constraints.

While the process may take time, the need for this action and reform is immediate. Innovative financing mechanisms such as TIFs, future stamp duty uplifts and S106 payments need to be handed to the core cities as the seed for private infrastructure investment. This must be in conjunction with a coherent and joined up vision for long term infrastructure investment that allows these cities to grow and reach their economic potential, to the benefit of all.